A day after the Federation of Hotel & Restaurant Associations of India (FHRAI) warned OYO of nationwide protests over large scale breach of contracts including misleading customers, the room aggregator said that the apex body of the Indian hospitality industry appears to have been misled by claims of certain bodies.
In a statement issued on Tuesday, OYO said that it “strongly condemns the misplaced demands of certain organisations, as the same are not in the best interest of consumers or asset owners”.
“We are aware of the recommendations made by FHRAI, and believe that the same are misguided and misplaced, and based on incorrect allegations made by small groups of people (not necessarily by franchisees and lessors associated with OYO Hotels) with vested interests,” said an OYO spokesperson in the statement.
“Neither are these demands aligned with the sentiment of the larger group of asset owners franchised or leased their property with OYO Hotels,” the statement added.
The statement said that certain bodies have incorrectly claimed that OYO charges high commission.
“We would like to confirm that our franchise fees are not only in line with the industry, but it also enables us to create and maintain a world-class distribution platform for our asset owners and invest heavily in the improvement of the asset related infrastructure,” OYO said adding that it has never charged over 25 per cent franchise fees and do not intend to in the future unless it invests a massive amount of capex in the property.
“OYO, like all other branded hotel chains, follows strict compliance procedures, and is fully compliant as a franchisor or lessee operating in India,” the statement said.
Defending itself and its tariff structure, OYO said that it can deliver predictable and affordable tariffs to customers because it can reduce its cost of operations significantly when compared to traditional hotel companies through the use of technology, superior talent and scale.
“If OYO Hotels were to fulfill the unreasonable demands to hike price, OYO Hotels will be the first beneficiary, but with our experience, we understand that this will disturb market dynamics and cause a disservice to both the customers and asset owners,” the company said.
“Complying with these demands will not only make the category expensive for customers…but will also lead to a drop in occupancy and thereby impact overall business adversely in the long run,” it read.
The company said that more and more people are choosing OYO every year because of its “collective focus on delivering high-quality customer experiences”.
“We are privileged to partner with asset owners and independent hoteliers across the country and globally, to ensure a much higher occupancy leading to better financial returns on all of their hard-earned investments,” said the spokesperson.
The hotel aggregator said that on an average 75 per cent of hotel owners associated with OYO have seen an increase of 20-30 per cent in occupancy in the first three months of operation as an OYO branded property.
“The pushback on adoption of forward-looking business practices such as dynamic pricing will, in the long run, be detrimental to the hospitality landscape, hoteliers and most importantly the customers,” warned OYO.
The company said that it is actively engaging with the asset owners, franchisees and lessors associated with OYO Hotels, on a one to one basis to understand and address their concerns and work towards further strengthening our relationship with them.